Hard to imagine that a simple price gun used to put price tags on products sold at retail stores is a symbol for what ails Michigan.

Yet that is exactly how economist Brian Wesbury sees it.

The law requiring retailers in Michigan to label every item on store shelves, in an age of digital price scanners, shows that state government doesn’t trust business.

“The reason for the price gun is your problem — you don’t trust business. That’s a serious problem in a relationship between business and government,” Wesbury said during a luncheon address today at the West Michigan Policy Forum in Grand Rapids. “If you let that stand, that message stays out there very day. It’s a symbol.”

Wesbury, chief economist at First Trust Advisors in Chicago, said the public sector needs to trust that if it reduces spending and taxes, the private sector will use the money to create jobs.

“What we need is faith in people, and when they make you mark everything with a price gun, you don’t have faith in people,” he said. “In the end, you need to have people have faith in business. And if they don’t, you’re never going to get rid of this.”

One of the problems plaguing Michigan and the nation is that government has become “too big and too costly and that costs the private sector,” said Wesbury, supporting one of the major themes of the Policy Forum.

“Hopefully, there's a better balance in the years to come," he said.

He offered data showing that spending by the State of Texas equals 6.0 percent of the state domestic product, versus Michigan’s 10.5 percent. Texas, he said, has lower unemployment and higher personal income than Michigan.

In 1969, Michigan accounted for 4.7 percent of the entire nation’s personal income. It’s now at 2.7 percent, while Texas stands at 7.7 percent, Wesbury said.

Speakers at a Policy Forum session later in the afternoon on state spending and budget priorities supported the notion that Michigan’s persistent structural deficit hurts it economically.

Joe Lehman

“The more state government cannot live within its means, the harder it is to create jobs here,” Mackinac Center for Public Policy President Joe Lehman said.

The Mackinac Center advocates bringing the wages and benefits of state employees in line with the private sector, a move that would save state government $5.7 billion annually to put toward education, transportation infrastructure and eliminating the Michigan Business Tax.

Public employee unions that strongly oppose such a change “have to make the argument that they deserve better insurance and vacations and pensions than the people they work for,” Lehman said.

Finding ways for the state to better invest in higher education and "quality of place" is essential, Michigan Future Inc. President Lou Glazer said. At a time when investments in higher education are needed more than ever before, Michigan has been divesting, Glazer said.

Citing data that shows states with the highest percentages of people with college degrees have the highest per-capita incomes, the Ann Arbor-based Michigan Future Inc. concludes that "the place with the greatest concentration of talent wins."

Lou Glazer

"Increasingly, what is driving the economy is human capital," Glazer said. "We have to reverse these budget priorities."

And knowledge-based economic sectors have the highest growth rates in the nation, he said.

In looking ahead in his address, Wesbury said the U.S. economy is “in the midst of a very, very strong recovery." He sees national economy accelerating into next year and unemployment declining steadily over the next two to three years to 7 percent to 7.5 percent.

Michigan’s unemployment rate should stay about two percentages points higher than the national rate, he said.

Overall, Wesbury said he’s “really optimistic” about the national economy. He called many fears about the economy a form of "economic hypochondria."

“There’s never been a better time in the history of this nation to take advantage of technology productivity,” Wesbury said.

The federal government two years ago overreacted to the financial meltdown, worsening the situation and eroding confidence, Wesbury believes. Banking problems were worse in the early 1980s than they were in 2008, he said.